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Calculate your capital gains tax liability on investments, real estate, and other assets sold in the US. Covers short-term and long-term rates by filing status.
Capital gains tax applies when you sell an asset for more than you paid. The federal rate depends on two factors: how long you held the asset and your total taxable income. Short-term gains on assets held under one year are taxed as ordinary income at rates up to 37%. Long-term gains on assets held over one year qualify for preferential rates of 0%, 15%, or 20% depending on income. High earners may also owe the 3.8% Net Investment Income Tax (NIIT) on top of the capital gains rate. Strategic timing of asset sales can significantly reduce your tax liability.
For 2024, long-term capital gains rates are: 0% for single filers with taxable income up to $47,025 (up to $94,050 for married filing jointly), 15% for income between those thresholds and $518,900 (single) or $583,750 (married), and 20% for income above those amounts. These thresholds are higher than regular income tax brackets.
Cost basis is what you paid for an asset, adjusted for certain events. For stocks and securities, it includes the purchase price plus commissions. For real estate, it includes the purchase price plus closing costs, capital improvements, and minus depreciation taken. For gifts, you generally inherit the donor's cost basis. For inherited assets, basis steps up to the fair market value at the date of death.
Yes. Capital losses first offset capital gains dollar-for-dollar, and like-term losses offset like-term gains first (short-term against short-term, long-term against long-term). Net capital losses of up to $3,000 can be deducted against ordinary income per year. Excess losses carry forward indefinitely to future tax years.
Yes. If you owned and lived in your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 of gain from tax ($500,000 for married couples filing jointly). This exclusion can be used repeatedly, but not more than once every two years. The gain above the exclusion is taxed at capital gains rates.
The NIIT is an additional 3.8% tax on net investment income (including capital gains, dividends, and rental income) for high earners. It applies to the lesser of your net investment income or the amount your modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly). This means top-bracket investors can face a combined federal rate of 23.8% on long-term gains.
Have more questions? These calculators provide estimates for educational purposes only. For personalized financial advice, consult with a qualified financial professional. See our disclaimer for more information.